US Senate passes debt limit bill with minimal fuss

PLAYING BALL?Following criticism that they had previously been recalcitrant on the US’ fiscal issues, Republicans passed debt legislation which did not include any spending cuts

Reuters, WASHINGTON

Completing a major Republican retreat from another messy showdown with US President Barack Obama, the US Senate on Thursday passed legislation to allow the government to keep borrowing money at least through May 19.

The measure has already passed the Republican-controlled US House of Representatives and its next stop is Obama, who is expected to sign it into law.

Consideration of the bill, which will permit the US Treasury to borrow beyond its current US$16.4 trillion debt limit, was unaccompanied by Republican attempts to extract spending cuts from Obama.

In the past two years, House Republicans have drawn the wrath of many voters and financial markets for pushing the government to the brink of a shutdown and an unprecedented default.

Stung by opinion polls blaming them more than Democrats for such consequences, Republicans have decided to try less disruptive tactics in their deficit reduction efforts.

The Democratic-led Senate passed the bill, 64 to 34, a week after the Republican-controlled House of Representatives approved it, 285 to 144. Both votes were bipartisan.

The legislation would put off until at least May 19 a showdown over the debt limit between Republicans, who demand more spending cuts to shrink deficits, and Democrats, who favor reducing deficits with a mix of spending cuts and tax hikes.

McConnell opposed the bill because it did not contain spending cuts, spokesman John Ashbrook said. “What’s needed now is a long-term solution to Washington’s out-of-control spending and debt,” Ashbrook said.

Senate Democratic leader Harry Reid said passage of the bill shows Washington will not engage “in another irresponsible debate about whether the United States government should pay its bills.”

By suspending enforcement of the debt limit, expected to be reached as early as the middle of this month, the government would keep borrowing money and paying its bills until at least May 19, when the limit would again be enforced.

Under the bill, the debt limit would have to be reset on that date to whatever level the debt reaches by then, likely about US$17 trillion. Obama has refused to negotiate on the debt limit.

Several other budget skirmishes are likely over the next five weeks. Congress must consider what to do about automatic budget cuts set for the beginning of next month and a measure to continue funding the operations of the government that must be in place by March 27.

Many Republicans have said they want to avoid either scenario this year. However, they are also demanding more spending cuts and insist they will not go along with tax increases.